Best Practices for Performance Reviews

By Bridget Miller
As we enter the new year, it’s performance review time for many employers—or it soon will be. While the annual review is one of the most universally dreaded times for managers and employees alike, training your managers with a few best practices can help. Here are some tips from business writer Bridget Miller.

Let’s take a look at 7 best practices for employee performance reviews:

1. Ensure that employee goals are in alignment with organizational goals and objectives. For example, if the organization has a goal of improving safety, it would make sense for individual employees to have goals related to reducing accidents and injuries.
2. Train managerial staff (and anyone involved in conducting performance reviews) how to avoid discriminatory bias or retaliatory actions during the process. For example, if an employee took Family and Medical Leave Act (FMLA) leave during the course of the year, it would appear to be retaliatory if the manager noted his or her performance lower as a result of taking leave. This can happen inadvertently, so managers must be aware.
3. Remember to give employees feedback all year long; don’t hold onto everything for a performance appraisal. This may take some communication with the entire management team to ensure that managers don’t think it is appropriate to hold feedback for the “official” review. It can even be a topic of ongoing training with the management staff to ensure they’re giving frequent feedback (not just negative feedback) all year long. When feedback is provided, ensure that it is given in a way that the employee can act on it directly and that he or she understands how to improve.
4. Use the performance appraisal as an opportunity to discuss future goals. This can include career development, training, and more. It can also dovetail into the organization’s succession planning efforts as you determine which employees have the skills and desire to advance into more senior roles.
5. Seek employee feedback. These types of conversations should not be one-sided. Employees should be encouraged to give feedback about the organization, their work processes, and more. They should also be encouraged to give input into their annual goals to ensure they’re reasonable. This can help employees feel a sense of ownership over the process and be more likely to be motivated to achieve their goals.
6. Be sure employees understand what component of their salary (if any) is tied to their performance and what they must do to earn that component. This is also known as “at-risk” pay because it’s not guaranteed to be paid unless the employee meets certain performance goals. This type of discussion needs to occur at the beginning of the performance planning cycle, not at the end, so there are no surprises when the review is conducted. However, also remember that if there is no at-risk pay directly tied to the performance appraisal process, it’s better to keep compensation discussions separate when possible.
7. Coach managers to give specific (rather than generic) feedback to employees. The feedback should be actionable and should not be a surprise—and it likely won’t be if managers have been communicating throughout the year (as noted above). Ensure managers understand to give both constructive and positive feedback while focusing as much as possible on the positive; this should be an opportunity to grow and foster good working relationships; it should not be a substitute for a disciplinary meeting.

 
As you can see, many of these items will take strong communications with the entire managerial and supervisory team to implement effectively. It may take ongoing training efforts to keep everyone on the same page, consistently implement these ideas, and keep a strong, positive workplace culture that helps employees to achieve their goals, thus helping the organization achieve its own big-picture goals and objectives.
In tomorrow’s Advisor, we have some more performance review tips for our readers.